Michigan Developments
Eric Rule,
Director of Governmental Affairs

Credit card truncation bill passes committee
Legislation requiring credit card machines to truncate all but the last four digits of account numbers on credit card receipts passed from the Senate Economic Development, Small Business and Regulatory Reform Committee with MRA’s support. MRA supported SB 220, sponsored by Sen. Valde Garcia (R-Howell), after securing key amendments from the sponsor the morning of the hearing.

The key amendments were an exemption for manual imprinters and a phase-in period to mirror that of the recently passed Visa/MasterCard rules. The bills were initially drafted—and were poised to pass—without these key exemptions.

With the amendments, retailers will have 60 days to comply for equipment purchased after the bill takes effect, and until July 1, 2006, for those machines (except for manual imprinters) purchased prior to the bill taking effect.

Tobacco equity legislation promotes fairness
A package of bills in both the House and the Senate may net the state as much as $30 million per year by forcing some tobacco companies to pay a per-cigarette assessment on all cigarettes they sell in Michigan. The legislation is expected to increase the price of less expensive off-brand cigarettes by 35 cents per pack.

The bill would affect “nonparticipating companies,” that is, those not party to the 1998 master settlement agreement, who receive a refund on payments they make into an escrow account that was established to offset the pricing advantage they have over the companies involved in the agreement.

The bills passed from the House Tax Policy Committee with the bare minimum of votes needed. The Senate bills also passed from the Senate Tax Policy Committee with less debate and without protracted voting.

Compromise fills budget holes
Gov. Jennifer Granholm and Senate Majority Leader Ken Sikkema (R-Wyoming) have agreed to a plan to fill the state’s $920 million hole in the Fiscal Year (FY) 2004 budget. The compromise freezes the 0.1 percent income tax rollback until July while reducing the Single Business Tax employers pay on health insurance by 20 percent in 2005 and another 20 in 2006.

Higher education will see a 5 percent cut in spending, or 3 percent if universities and colleges agree to hold tuition rate increases to the rate of inflation over the next two years. The pro-rata cuts to K-12 education will go from $196 per student to $92 per student.

Legislation on gift cards expected
Senator Gerry Van Woerkom (R-Muskegon) is set to introduce legislation regulating customer gift cards and gift certificates in ways similar to changes recently enacted in California. It would include regulations that prohibit expiration dates and fees charged for cards that remain unused for a specified period.

Sen. Van Woerkom’s staff sought MRA’s input because of our interest and leadership in the gift card field. Fortunately, Sen. Van Woerkom has been an ally in the past and should be more open to our concerns on this issue than others might be.

House Speaker backs sales tax increase
A proposal to abolish the gas tax and increase the sales tax by 1 percent has gained the support of House Speaker Rick Johnson (R-LeRoy), who joined with the chair of the House Transportation Committee in backing the plan. In addition to wiping out the state’s 19-cent gas tax, the proposal would reduce the diesel fuel tax by five cents a gallon in exchange for the 1-percent increase in the sales tax.

Johnson believes an increase in either the gas tax or diesel tax is unlikely. He believes a sales tax increase has the best shot of securing additional dollars for Michigan’s roads. Dropping the gas tax would help tourism, since Michigan would have some of the lowest gas prices in the region.

Notable Democrats have come out against the sales tax increase. House Minority Leader Dianne Byrum (D-Lansing) believes the sales tax is regressive, targeting middle and low-income families.

The proposal would require statewide voter approval and faces long odds of becoming reality. MRA will weigh in on the issue and remind lawmakers that increasing the sales tax affects retail sales and the industry opposes the approach.

Update from Washington
James Goldberg,
MRA Washington Counsel

Lawmakers agree on bill to "can spam"
Shortly before adjourning for the year, Congress gave final approval to legislation that would help fight the flood of unwanted e-mail. The bill’s name is designed to make it memorable: “Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003” or the “CAN-SPAM Act.”

The bill would require senders of unsolicited commercial e-mail to allow recipients to opt out of further e-mail, and to provide valid return addresses on their e-mails so that recipients can do so easily.

Statutory damages could range up to $2 million for violations, and the Federal Trade Commission and state attorneys general would be empowered to enforce the bill’s requirements.

The bill would provide the FTC with the authority to establish a “Do-Not-Spam” registry modeled on the “Do-Not Call” registry for unsolicited telemarketing telephone calls. However, the FTC has indicated it doesn’t think such an idea is feasible.

Recall website is operational
The Consumer Product Safety Commission (CPSC) has announced the roll-out of a new website—www.recalls.gov
—that will contain information on all products ordered recalled by several government agencies.

CPSC officials are soliciting cooperation from individual retailers and associations to promote the site, which will feature information from the National Highway Traffic Safety Administration, the Food and Drug Administration, the Environmental Protection Agency and the Food Safety and Inspection Service, in addition to CPSC.

In addition to providing information to consumers about product recalls, CPSC officials said the “game plan” for the site includes a feature to enable retailers to receive e-mails specific to their product interest.

Labor can proceed with "white collar" rules
A controversial rule, supported by business but strongly opposed by union members and others, is back on track. The Department of Labor’s regulation overhauling the so-called “white collar” exemptions from overtime pay requirements was nearly killed when both the House and the Senate approved withholding funding.

Congressional leadership bypassed that roadblock by rolling all unpassed appropriations bills into one giant, omnibus measure shortly before going home for the year.

Sen. Arlen Specter (R-PA) objected to deleting the funding prohibition, but, in the end, he backed off after the White House made it clear that the president would veto any bill that contained the provision.

FCC orders dual tuners on new TVs
The Federal Communications Commission has issued an order that will require manufacturers of television sets to provide both analog and digital tuners beginning July 1, 2004, on sets with screen sizes of 36 inches or higher. At least 50 percent of a manufacturer’s sets in that size range must have the dual tuners for an 18-month period beginning next summer; thereafter, all sets will have to have the dual tuners.

Many retailers and manufacturers are upset, believing the 50-percent phase-in will cause confusion in the marketplace, due to price differentials that are likely to occur as a result.

The new requirement is one of a series of recent FCC pronouncements designed to make it easier for consumers to receive cable and satellite TV signals without the use of the familiar “set-top” box and to open the competition for those boxes to all suppliers.

Video programming privacy bill introduced
Rep. Edward Markey (D-MA) has introduced the Video Programming Consumer Privacy Protection Act, a bill that seeks to extend existing laws governing privacy of cable and video-rental records to other forms of distribution.

Specifically, the bill would extend 1992 cable privacy rules to direct-broadcast satellite and “video on demand” services purchased from cable companies. Additionally, the legislation extends privacy regulations to digital video-recording services (such as TiVo) by defining them as “multichannel services vendors.”

It’s unclear whether retailers who offer such distribution services would be required to comply with the customer privacy requirements, or whether they are only applicable to the service providers.

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